Spinks is discussing Guild Wars 2 economics, quoting Eric on how large auction houses sink prices. Economic theory tells us that this isn't true. The larger you make a market, the more efficient it becomes, and the faster prices reach the correct level. The correct level being the determined by supply and demand. The problem in Guild Wars 2 and Diablo 3 is not that they have large auction houses connecting all servers. The problem is that they have large supply of items compared to much less demand.

Imagine that after every fight some of your gear would break and would have to be replaced. Given the exact same large auction house, Guild Wars 2 prices for items would be a lot higher. Prices would also be higher if crafting an item would be a mini-game that took half an hour for every item crafted.

Making auction houses smaller is not a solution, if we want good prices for crafted items we need to change the supply and demand for these items. If it wasn't so trivial to craft hundreds of items, their price wouldn't be so low.

@Spinksville - Indeed, what Eric says in his post is a bit more subtle than the title suggests.

But the "auction houses suck" idea was picked up elsewhere in a way that was less subtle.

GW2 is the current poster child, but it seems almost comical to blame the auction house for the situation.

If I understand things correctly, you have easily collected materials, easy to use trade skills, recipes of optimum efficiency (i.e. there is a "right" recipe if you want to advance at the least cost), which yields items that are not all that great, and it is incentivized by a system that gives adventure experience for crafting.

The auction house is just a detail by that point, a way to measure how easy/cheap to produce and how really useful the item is.

That isn't a problem that would be solved by taking away the auction house and opening up SWG-like player vendor locations.

The larger you make a market, the more efficient it becomes, and the faster prices reach the correct level. The correct level being the determined by supply and demand.

Actually, if you do some reading around, it turns out that this does not even remotely match real-world data. Keen does a good job of demolishing it in Debunking Economics.... The problems is that as much as it "sounds right", it results from extremely unrealistic assumptions, like a single-commodity market and a central planning authority which redistributes wealth.And all this is without adding the fact that MMO "worlds" have some properties which are completely different from the real world, an example being that all resources are unlimited except player time, which is not allocated for market efficiency but for maximization of fun.... and we don't even know what this "fun" thing is...

What you propose has been tried in other games (I'm thinking Ryzom), but unless crafting is completely unrelated to progression, the market ends up filled by items created for leveling. It also requires a large population involved in crafting: if everyone ends up being forced to craft for himself the result will be the same.

The fact that Eve exists means that it's possible to do better than current MMOs, the fact that Eve is a fringe MMO means that unless you want your MMO to be fringe you better be careful....

Tobold said: if we want good prices for crafted items we need to change the supply and demand for these items. If it wasn't so trivial to craft hundreds of items, their price wouldn't be so low

Actually crafting an item in GW2 isn't so trivial. Fine crafting materials aren't so common as you may think and lot of people have stuck in leveling their profession. The problem is that mons drops a lot of gear. 1-2 Dynamic events and my bags are full of blue and green gear..If the only way to get gear was crafting and personal story, the demand would be very close to supply and even higher

One could also point out that if the bulk of the folks posting crafted goods to the Market knew the basics of how the GW2 materials system worked, they'd know the basic and intrinsic worth of a good was about the cost of the single use of a Salvage Kit it takes to turn it back into some portion of the goods used to craft it. One would also hope that other posters in this thread would know that.

One would also end up sorely disappointed.

The overall problem some seem to have with the GW2 Market is they have no idea what valuation by market demand actually means and are functioning under the wholly mistaken belief that it should mean whatever is advantageous for them at any given time. Their ignorance has, somehow, begun being taken seriously as dicta about how the world works.

Why not simply make it so that crafting materials are needed to repair items? Got a sword, gonna need that tier of metal to fix it. Leather armor? better get some scraps using a salvage kit or the AH. It's SO easy to stumble over materials in this game, why not use some of them for things other than creating new items to flood the market with?

Why not simply make it so that crafting materials are needed to repair items? Got a sword, gonna need that tier of metal to fix it. Leather armor? better get some scraps using a salvage kit or the AH. It's SO easy to stumble over materials in this game, why not use some of them for things other than creating new items to flood the market with?

Everyone is thinking about this completely wrong. You've been brainwashed by countless games and economies before you.

The reason you craft is not for money. You craft for access to high end soulbound items, leveling, account achievements, and other vantiy bonuses.

If your goal is to make money, don't sell end items, sell the materials.

The thing everyone also forgets is it goes both ways. If all the end items are going for npc vendor price. Its a GOOD thing.

Why? Well, Do you want those high end daggers with inscription upgrades? Go buy them for super cheap and slightly more than npc vendor. Basically, this new economy is about creating access, not restricting it.